The automated teller machine (ATM) entered India by late 1980s and have evolved into three of its types by now—
(i) Bank’s own ATMs: These are owned and operated by the concerned bank and carry the bank’s ‘logo’. They are the costliest way to provide such service to bank’s customers.
(ii) Brown Label ATMs (BLAs): These are owned by a third party (a non-banking firm). The concerned banks only handle part of the process that is ‘cash handling’ and ‘back-end server’ connectivity. They carry the ‘logo’ of the bank which outsources their service.
(iii) White Label ATMs (WLAs): These are ‘owned’ and ‘operated’ by a third party (a non-banking firm). They do not bear ‘logo’ of the banks they serve (that is why such a name). In place, they carry the logo of the firm which owns them. They serve customers of all banks and are interconnected with the entire ATM network in the country. The role of the concerned bank is only limited to provide account information and back-end money transfers to the third parties managing these ATM machines. These entities have a mandate to deploy 67 percent of ATMs in rural locations (Tier III-VI) and 33 percent in urban locations (Tier I and II cities). The Tata Communications Payment Solutions became the first such firm to get the permission of the RBI (by mid-2013) to set up such ATMs – its brand name is ‘Indicash’.
The main objectives of the Brown/White Label ATMs are cutting operation cost of running them and financial inclusion.
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